Internal Auditing 2.0: How the IIA is Rewriting the Rules

Ever wondered how the world of internal auditing will look in 2035? If you’re picturing a realm where traditional auditing practices meet cutting-edge technology, you might just be onto something. According to the latest report from the Institute of Internal Auditors (IIA), a seismic shift is set to transform the role of internal auditors in ways you probably didn’t expect. Intrigued? Let's dive into the current state of internal auditing, explore what the future holds, and discuss why you should pay attention.

A New Era for Internal Auditors?

During the IIA’s international conference in Washington, D.C., the report, titled "Internal Audit: Vision 2035," paints a picture of a profession on the brink of radical change. The IIA’s Internal Audit Foundation surveyed over 7,000 professionals and stakeholders worldwide, and their findings are anything but mundane. More than half of the respondents believe that by 2035, the role of internal auditors will be drastically different from what we see today. 

Why the dramatic change? It’s all about technology. A whopping 97% of respondents expect new tech to throw a whole lot more data at auditors. But it's not just about more data—93% believe that tech will help auditors deliver sharper, more insightful recommendations. And then there's artificial intelligence (AI). While only 48% are currently diving into AI-related activities, this number is poised to soar. 

From Number Crunchers to Strategic Advisors

Internal auditors evolve from behind-the-scenes number crunchers to strategic advisors with a finger on the pulse of their organization’s future. The IIA report suggests that this shift will involve auditors using advanced technologies like quantum computing and virtual reality to provide real-time, strategic insights. Is this the dawn of a new era for auditors, where their role extends far beyond traditional assurance and into proactive, strategic guidance? 

According to the report, 79% of surveyed professionals believe that advisory work will become increasingly crucial in the coming years. This means a significant shift in the internal audit function’s focus. Currently, auditors spend about 76% of their time on assurance services, but this is expected to drop to 59% by 2035, while advisory services are set to rise from 24% to 41%.  

The Challenges of Change

While the future looks promising, it’s not without its hurdles. The report highlights a critical issue: about 45% of respondents feel that their organizations only moderately understand or outright overlook the importance of independence and objectivity in internal audits. How will this lack of understanding impact the credibility and effectiveness of internal audits in the future? 

As the profession evolves, so too does the challenge of attracting and retaining talent. The IIA’s report reveals some concerning trends among students and educators. A third of students cited inadequate networking opportunities with internal audit professionals as a major barrier to entering the field. Similarly, 28% mentioned a lack of mentorship and misconceptions about career prospects. Educators also noted a lack of awareness about the profession.  

What Lies Ahead?

As we look towards 2035, the internal audit profession stands at a crossroads. The IIA’s report paints a picture of a dynamic, technology-driven future where auditors are strategic advisors, leveraging cutting-edge tools to offer invaluable insights. But this future won’t come without its challenges. 

The profession must adapt to these changes or risk becoming obsolete. Embracing new technologies, shifting focus to advisory services, and addressing talent shortages are all part of the roadmap to a successful transformation. 

So, what does this mean for you? Whether you’re a current internal auditor, a prospective student, or someone interested in the future of this field, the message is clear: prepare for a radical transformation. The future is bright, but it requires action today. 

How the Future of Internal Auditing Impacts Tax Professionals

• Embrace emerging technologies like AI and data analytics to enhance tax planning and compliance, aligning with the increasing reliance on tech in auditing. 
• Develop skills in strategic advisory to move beyond traditional compliance, using your tax expertise to offer actionable insights and guidance. 
• Enhance your data analysis capabilities to manage complex data sets effectively, providing valuable insights for tax strategy and risk management. 
• Stay informed about new and evolving tax risks and regulations to handle compliance and strategic planning effectively. 
• Maintain principles of independence and objectivity to ensure accuracy and credibility in your tax work. 
• Collaborate with internal auditors to align tax strategies with broader organizational goals, leveraging their evolving role as strategic advisors.

Stay tuned as we continue to follow this evolving story. The world of internal auditing is on the cusp of a major revolution, and you won’t want to miss it. Are you ready to be a part of this exciting journey into the future of internal auditing? The countdown to 2035 is on—let’s make sure we’re ready for it!